EUR/GBP Price Forecast: Short-term trend reverses on a dime, bulls back in charge
Source Fxstreet
- EUR/GBP is undergoing a short squeeze higher.
- Upside will likely be capped at the cluster of Moving Averages situated in the 0.8450s.
EUR/GBP has suddenly reversed and shot higher on Thursday, gaining over 1.0% on the day so far. The explosive rally suggests a short squeeze is happening and the short-term trend has reversed “on a dime”. Bulls are now back in control.
EUR/GBP Daily Chart
EUR/GBP will probably go higher. The next key resistance level lies at the cluster of Moving Averages in 0.8450s. From there, a temporary pullback is likely given the speed of the ascent. Any corrections are likely to encounter support at around 0.8385, the July lows.
One warning of the sudden reversal came from the fact that the Relative Strength Index (RSI) was converging bullishly with price (red dashed lines on chart). This signified a lack of downside momentum and increased chances of a pullback.
Another warning sign was that EUR/GBP has already reached the conservative target for the bear move that began at the August 5 high, at 0.8322. This raised the possibility that the whole move might have completely run its course, which appears to be the case given today’s price action.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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